12. Tax

Income tax (including deferred income tax)

Income tax recognised in profit or loss for the period covers actual the actual tax burden for the given reporting period, calculated in accordance with the applicable provisions of the act on corporate income tax and potential adjustments of tax returns for previous years.

Deferred tax is the tax effect of events in a given period recognised using the accrual principle in accounting books  for the period but is performed in the future. It arises when the tax effect of revenue and costs is the same as the balance sheet effect but takes place in different periods.

Deferred income tax arises in respect of all temporary differences, except for cases where deferred income tax results from:

1. initial recognition of goodwill; or
2. initial recognition of an asset or liability from a transaction that:
   • is not a merger of economic entities; and
   • has no impact at the transaction date on gross financial result or taxable income (tax loss);
3. investment in subsidiaries, branches, associates and interests in joint

In reference to all negative temporary differences, a deferred income tax asset is recognised up to an amount of likely taxable income to be generated that will offset the negative temporary differences.

The amount of deferred tax is set using income tax rates in effect for the year in which the tax obligation arises.

Recoverability of deferred income tax assets

Deferred income tax assets are measured using tax rates in effect when the asset is performed. The Group recognises a deferred income tax asset with the assumption that it will generate a tax profit in the future to use it.

The likelihood of using deferred income tax assets against future tax profits is based on the budgets of Group companies.

Income tax on the Group’s gross profit before tax differs from the theoretical amount that would be received by using the applicable nominal tax rate applicable to the consolidated companies as follows:

Changes in deferred income tax assets and provision (after offsetting assets and provision at Group level) are as follows:

Deferred income tax assets as at 31 December 2021 to be realised within 12 months amounted to PLN 1 360 715 thousand (PLN 876 244 thousand as at 31 December 2020), while those over 12 months PLN 1 507 142 thousand (PLN 1 386 216

thousand as at 31 December 2020).

Deferred income tax provision as at 31 December 2021 to be realised within 12 months amounted to PLN 863 348 thousand (PLN 361 512 thousand as at 31 December 2020), while those over 12 months PLN 1 077 422 thousand (PLN

1 049 981 thousand as at 31 December 2020).

As of 31 December 2021, there were no indications of the risk of a lack of recoverability of deferred income tax assets. According to the Group, the differences between the tax value and balance sheet value of tangible assets will be fully realised in the coming periods.

Change in deferred income tax assets and liabilities during the year (before offset):

Deferred income tax assets:

As at 31 December 2021, tax losses to be settled in future periods amounted to PLN 45 528 thousand. This amount was taken into account in calculating the deferred income tax assets and is presented in the column “Other.” This column also includes an asset from a provision for onerous contracts.

Deferred income tax provision: